[conistonwater]

Companies like that usually sell the order flow to market makers.

[jcfrei]

Good explanation of Robinhood's business model by Matt Levine: https://www.bloomberg.com/opinion/articles/2018-10-16/carl-i...

[umitanuki]

And by Evan https://medium.com/automation-generation/commission-free-tra...

[solarkraft]

I know Robinhood makes hundreds of millions with this, do you know how large the full market actually is?

[mrfredward]

Which is a nice way of saying you're in a pool of bait for high frequency traders.

...but that's really not so bad. Having an algorithm skim 2 cents/share off of you is a lot better than paying $5+ per trade (assuming you're not trading 1000s of shares, and you're not in penny stocks or options where spreads are big).

[conistonwater]

It's not a nice way of saying that, the "pool of bait" logic is totally wrong. There's a lot of nonsense written about high frequency trading on the internet, but for example Matt Levine's explanations are completely readable, correct, and on point (see the other comment).

[mrfredward]

If someone will pay to trade with you instead of someone else, you're definitely not getting the best price.

[SirLJ]

There is no free lunch... To paraphrase a friend from high school: "...when you start to play and don't know who the patsy is, usually it's you..." ;-)